Corporate Ownership, Control, and Firm Performance in Victorian Britain

Scholars have long debated whether ownership structure matters for firm performance. The standard view with respect to Victorian Britain is that family-controlled companies had a detrimental effect on operating profit and shareholder value. Here, we examine this view using a hand-collected corporate ownership dataset. Our main finding is that it was not necessarily the broad structure of corporate ownership that mattered for performance, but whether family blockholders had a governance role. Large active blockholders tended to increase operating performance, implying that they reduced managerial agency problems. In contrast, we find that directors who were independent of large family owners were more likely to increase shareholder value.

Active Controllers or Wealthy Rentiers?: Large Shareholders in Victorian Public Companies

This article addresses the issue of whether large shareholders in Victorian public companies were active in the control of companies or were simply wealthy rentiers. Using ownership records for 890 firm-years, we examine the control rights, socio-occupational background, and wealth of large shareholders. We find that many large shareholders had limited voting rights and neither they nor family members were directors. This implies that the majority of public companies in the second half of the nineteenth century cannot be characterized as family companies and that large shareholders are better viewed as wealthy gentlemen capitalists rather than entrepreneurs.